A billion dollars in Obamaphone fraud?

February 12, 2013

Remember the "Obamaphone Lady?" Sure you do! She was, in many ways, the exemplar of the 2012 presidential campaign: an angry welfare dependent outraged that anyone would dare to run against President Obama and threaten her benefits. The benefit she most prominently mentioned during her tirade at a Romney campaign event was her "Obama phone," a free government-provided cell phone.

As it turns out, she was wrong about Barack Obama as the source of this particular Big Government lollipop, but taxpaying Americans were astounded to discover that the government does indeed distribute free cell phones to Food Stamp Nation, under the aegis of a program originally instituted in the 1980s to help the poor obtain land-line telephones. Although the benefit expanded to include cell phones (even smart phones!) under the Bush Administration, popular urban legends attribute the phones to Santa Obama. These legends seem plausible to readers because the size of the "Lifeline" program, like every other aspect of Food Stamp Nation, has exploded under President Obama. It cost $819 million in 2008, but weighed in at roughly $2.2 billion last year. If you're a taxpayer with a cell phone, you're kicking in about $2.50 per month on your cell-phone bill to fund the program.

And, like every other government handout programs, Lifeline is absolutely riddled with fraud. No sooner had the Obamaphone Lady burst onto the scene than stories of scam artists making off with two, three, or even more "free cell phones" began circulating.

The Wall Street Journal reports that the Federal Communications Commission noticed that Lifeline seemed to be getting out of hand, and decided to "tighten the rules" last year. In other words, they actually started checking to make sure the proud owners of these welfare phones actually qualified for the program. Until now, much of the program's integrity depended on "self-certification," which is exactly what it sounds like. Better still, "subscribers didn't have to re-certify once they were enrolled in the program, and there were few checks on whether households signed up for more than one cellphone." And membership in almost any other Food Stamp Nation program, at either federal or state levels, was a ticket into the cell-phone program, creating a titanic base of potential "subscribers."

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